PFI - a licence to print money

WHEN THE Private Finance Initiative (PFI) was first brought into the NHS, hospitals signed up to contracts lasting up to 60 years. There were 'break points' where the health service could terminate the arrangement.

Now new information, obtained under the Freedom of Information Act, shows that one stipulation of the deals is that if the NHS does not fulfil the entire contract, the private firms keep the land leases, which could then be used for housing developments.

If the NHS were to end its 60-year PFI agreement at Queen Elizabeth Hospital in Woolwich, south London, the contractors would gain the right to use the land and buildings until the year 2126, 125 years after the deal was signed! In London in particular, this could mean big money for the private contractors.

The four hospitals in this part of south London - in Lewisham, Sidcup, Farnborough and QEH - are cash-strapped. Management at the four hospitals have issued a joint warning that either one hospital will have to close or they will have to merge services to save money.

Ironically, NHS managers could consider Queen Mary's in Sidcup the hospital most likely to close. It is the only local hospital with no PFI agreements so the NHS would lose less.

A recent Commons public accounts committee said that one problem with PFI is that local public-sector officials are unskilled at negotiations.

Even if this is true, the government knew what PFI was about, so they knowingly let their City of London friends use hospitals (and schools and other public services) as ways of making themselves rich.